Set up a SEP-IRA Rollover?

17 May

SEPĀ  IRA rollovers can be established virtually anywhere you would like to invest – at a bank, a mutual fund company, or a brokerage firm.

Is it possible to Rollover a SEP IRA to a Roth IRA?

Yes. This particular rollover SEP IRA to Roth IRA can make a lot of sense, because it allows you to invest more than the maximum allowed per year in a Roth. Let’s say that your income would allow you to contribute $12,400 a year to a SEP IRA. You can make that deposit and then, as long as your total income is less than $100,000 that year, you can rollover that SEP IRA to a Roth IRA. Essentially, you will have managed to put a great deal more than the annual limit into a Roth. You will have to pay taxes on the $12,400 after you convert, but you can deduct that same $12,400 from your income as SEP IRA deduction. If you are self-employed, consult a tax specialist to see how much you could contribute to a SEP IRA, and consider making this rollover.

For an employer, what is the downside of a SEP IRA?

If you fund a SEP for yourself and have employees who have worked for you for three of the past five years, you also required to fund their SEPs. The money in these accounts vests automatically, and if your employees leave tomorrow, they will be able to take that money with them. Wither a SEP IRA, employees are 100 percent vested at all times.

Can I have a SEPĀ  IRA and a Roth IRA?

Yes, you have both a Roth IRA and SEP IRA if you meet the income requirements.

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